Good news for e-commerce exporters and small businessmen! The GST Council has approved a major proposal and removed the limit on GST refunds for low-value goods.
This means that no matter how small the value of exported goods is, exporters will now get the benefit of tax refunds.
What Has Changed?
Earlier, small exporters faced difficulties because GST refunds were capped on low-value goods.
Now, with an amendment to the CGST Act, 2017, all types of exports—whether low or high in value—will qualify for tax refunds.
This step will especially help exporters who send small shipments abroad through courier or postal services.
They no longer need to worry about losing refunds, which will improve their cash flow and solve working capital shortages.
Industry Welcomes the Reform
According to the Commerce Ministry, this reform was long pending and directly addresses small exporters’ biggest concerns.
Industry bodies have also welcomed the move, saying that quicker refunds, rationalized rates, and temporary tax relief will reduce the burden on small traders and strengthen the supply chain.
Key Sectors That Will Benefit
Several major sectors will gain from this GST reform:
Paper, textile, leather, and wood: GST reduced from 12–18% to 5%, lowering production costs.
Toys and sports goods: GST reduced from 12% to 5%, boosting domestic manufacturing and reducing dependence on imports.
Trucks and delivery vans: GST cut from 28% to 18%, lowering logistics costs and giving exporters a global competitive edge.
Packaging material: Reduced taxes will cut export costs, allowing businesses to offer better prices in foreign markets.
Boost to ‘Vocal for Local’
The government believes these reforms will strengthen the ‘Vocal for Local’ campaign. Small and medium businesses will be able to compete internationally.
India could also become a global hub in textiles, handicrafts, auto components, tractors, and food processing.
Impact on Consumers
These reforms will not just help exporters but also benefit consumers.
With reduced tax rates, production costs will go down, inflation pressure will ease, and common people will get better products at lower prices.
